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It is vital to measure language proficiency
well, as it crucially determines immigrants’ earnings

Over recent decades, Western countries have
admitted many immigrants from non-traditional regions (e.g. Philippines,
India, China), which has coincided with poor economic integration. Language
proficiency is an important determinant of economic integration; in addition
to being a component of human capital, it plays a key role in facilitating
the transmission of other components of human capital. Examining the
strengths and weaknesses of objective and subjective measures of language
proficiency is crucial for good integration policy, as is understanding the
relationship between these measures and earnings, a key indicator of
economic integration.

Business ownership is higher among immigrants,
but promoting self-employment is unlikely to improve outcomes for the less
skilled

Immigrants are widely perceived to be highly
entrepreneurial, contributing to economic growth and innovation, and
self-employment is often viewed as a means of enhancing labor market
integration and success among immigrants. Accordingly, many countries have
established special visas and entry requirements to attract immigrant
entrepreneurs. Research supports some of these stances, but expectations may
be too high. There is no strong evidence that self-employment is an
effective tool of upward economic mobility among low-skilled immigrants.
More broadly prioritizing high-skilled immigrants may prove to be more
successful than focusing on entrepreneurship.

Immigrants initially earn less than natives;
the wage gap falls over time, but for many immigrant groups it never
closes

Immigrants contribute to the economic
development of the host country, but they earn less at entry and it takes
many years for them to achieve parity of income. For some immigrant groups,
the wage gap never closes. There is a wide variation across countries in the
entry wage gap and the speed of wage assimilation over time. Wage
assimilation is affected by year of entry, immigrant skill, ethnicity, and
gender. Policies that facilitate assimilation of immigrant workers provide
support for education, language, and employment. Such policies can also
reduce barriers to entry, encourage naturalization, and target selection of
immigrants.

Where STEM immigrants were educated strongly
influences their economic success and possibly their impact on
innovation

Canada, the US, and most Western countries are
looking to STEM (science, technology, engineering, and mathematics)
immigrants to boost innovation and economic growth. Canada in particular has
welcomed many STEM immigrants over the past quarter of a century. In the US,
there is an ongoing debate about whether the H–1B visa program is being used
effectively to attract more STEM immigrants. Interestingly, significant
differences exist between the two countries in earnings and likely the
innovation activity of highly educated immigrants, which highlights the
likely role of immigration policy in determining such outcomes.

Do poor labor market opportunities lead to
migrant crime?

Immigration is one of the most important
policy debates in Western countries. However, one aspect of the debate is
often mischaracterized by accusations that higher levels of immigration lead
to higher levels of crime. The evidence, based on empirical studies of many
countries, indicates that there is no simple link between immigration and
crime, but legalizing the status of immigrants has beneficial effects on
crime rates. Crucially, the evidence points to substantial differences in
the impact on property crime, depending on the labor market opportunities of
immigrant groups.

Blind recruitment can level the playing field
in access to jobs but cannot prevent all forms of discrimination

The use of anonymous job applications (or blind
recruitment) to combat hiring discrimination is gaining attention and
interest. Results from field experiments and pilot projects in European
countries (France, Germany, the Netherlands, and Sweden are considered
here), Canada, and Australia shed light on their potential to reduce some of
the discriminatory barriers to hiring for minority and other disadvantaged
groups. But although this approach can achieve its primary aims, there are
also important cautions to consider.

A mix of policies could be the solution to
reducing discrimination in the labor market

Discrimination is a complex, multi-factor
phenomenon. Evidence shows widespread discrimination on various grounds,
including ethnic origin, sexual orientation, gender identity, religion or
beliefs, disability, being over 55 years old, or being a woman. Combating
discrimination requires combining the strengths of a range of
anti-discrimination policies while also addressing their weaknesses. In
particular, policymakers should thoroughly address prejudice (taste-based
discrimination), stereotypes (statistical discrimination), cognitive biases,
and attention-based discrimination.

Shifting the focus from immigrants’ initial
earnings to their propensity to invest in human capital

Immigrants who start with low earnings, such as
family-based immigrants, experience higher earnings growth than immigrants
who are recruited for specific jobs (employment-based immigrants). This
occurs because family-based immigrants with lower initial earnings invest in
human capital at higher rates than natives or employment-based immigrants.
Therefore, immigrants who start at low initial earnings invest in new human
capital that allows them to respond to the ever-changing needs of the host
country’s economy.

The adverse effects of unemployment are a cause
for concern for all demographic groups but they will be most acute for those
experiencing the highest unemployment rates. In particular, high levels of
unemployment are observed for a range of immigrant groups across many
countries. However, there is considerable variation both across and within
countries. It is therefore important to determine the factors that are most
likely to cause high rates of unemployment, especially from a migration
perspective, and to identify appropriate policy responses (e.g. enhancing
human capital and improving job search effectiveness).

The variation of racial wage gaps across and
within groups requires differing policy solutions

In many developed countries, racial and ethnic
minorities are paid, on average, less than the native white majority. While
racial wage differentials are partly the result of immigration, they also
persist for racial minorities of second and further generations. Eliminating
racial wage differentials and promoting equal opportunities among citizens
with different racial backgrounds is an important social policy goal.
Inequalities resulting from differences in opportunities lead to a waste of
talent for those who cannot reach their potential and to a waste of
resources if some people cannot contribute fully to society.